Loss of vital records can result in severe legal penalties and in financial losses due to a lack of business continuity.
Corporate officers are now ultimately responsible for protecting their organization’s vital records. Legislation such as Sarbanes-Oxley and HIPAA has attached large fines and even criminal penalties of up to 10 years in prison for failing to protect vital business documents, medical records, and digital media. Rule 26 of the Federal Rules of Civil Procedure mandate the expedient response to information requests in the discovery process, whether that information is in digital or hardcopy format. Failure to produce the required information will result in a summary judgment against the negligent organization — potentially costing millions in compensatory damages and punitive fines.
Indeed, the old model of storing records in warehouses suitable for storing warehouse commodities is no longer acceptable, especially for electronic records. This is especially true against the backdrop of recent media headlines and courtroom rulings that hold corporate officers legally and financially accountable for protecting and producing their company’s vital records.
CEOs and Boards of Directors must recognize their responsibility to protect the records that reflect their good stewardship. Furthermore, they must come to understand that successfully managing the modern world of risk means that vital information must be protected, while remaining accessible at a moment’s notice.